KRYNICA, Poland — The euro was like a sleeping pill ahead of the global economic crisis, as countries failed to wake up to the need to reform, European Commission President Jose Manuel Barroso (pictured) said.
“I don't want to think how we would be now if we didn't have the euro,” Barroso told the 20th Krynica Economic Forum, an annual gathering in Poland of politicians and business leaders dubbed the “Davos of the East”.
“But nevertheless, the euro was to some extent a sleeping pill, because there was not the pressure for some of the countries to make reforms. So they were keeping very high levels of debt,” he said.
The euro has been in circulation since 2002, a decade after the Maastricht Treaty opened the way for a shared European currency.
Speaking to reporters, Barroso noted that before the creation of the euro zone — which now has 16 member states — market pressure could have forced debt-ridden, slump-embattled countries to undertake reforms and devalue their national currencies.
Although euro zone member Greece has been the main focus, Barroso declined to name any individual nations.
“Which countries? All the countries that have excessive levels of debt, all of
them. There are so many that I'm not going to name each of them,” he said.
The past failure to wake up came despite repeated warnings from the European Commission, Barroso said. The commission is the executive body of the 27-nation European Union.
“The euro is a very, very good thing. So when I say it was acting as a sleeping pill, I'm not blaming the euro. I'm putting the blame on those that did not implement what is in the treaty,” he said.
The EU's Stability and Growth Pact, introduced after the Maastricht Treaty, was intended to ensure that members controlled their deficits.
“If all the member states had implemented the Stability and Growth Pact, we would not be in the situation we have been facing of huge deficits and huge debt levels,” said Barroso. “So the problem is not the euro, the problem is that some member states, in fact the majority, did not implement what was in the treaty they themselves signed,” he added. — AFP